labor Chap_007 - TEST BANK Robert J Lemke Lake Forest...

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TEST BANK Robert J. Lemke Lake Forest College Fall 2008 Labor Economics 5 th Edition George Borjas Chapter Seven 1. What does it mean for the U.S. economy to have a positively skewed wage distribution? A. Most workers earn below the average wage. B. A small proportion of workers earn very high wages. C. The average wage equals the median wage. D. Both (A) and (B) are implied by a positively skewed wage distribution. E. Both (A) and (C) are implied by a positively skewed wage distribution. Ans: D 2. In the United States, the poorest 10 percent of households earns approximately what share of total income? 3. In the United States, the wealthiest 10 percent of households earns approximately what share of total income? 4. Higher values of the Gini coefficient are associated with 5. In general terms, which of the following regarding changes in inequality in the United States is correct? A. Inequality has increased over the last 30 years as witnessed by the Gini coefficient increasing from about 0.1 in 1970 to about 0.7 in 2000. B. Inequality has increased over the last 30 years as witnessed by the Gini coefficient increasing from about 0.3 in 1970 to about 0.4 in 2000. 1
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C. Inequality has decreased over the last 30 years as witnessed by the Gini coefficient decreasing from about 0.5 in 1970 to about 0.05 in 2000. D. Inequality has decreased over the last 30 years as witnessed by the Gini coefficient decreasing from about 0.8 in 1970 to about 0.25 in 2000. E. Inequality has stayed about the same over the last 30 years as witnessed by a Gini coefficient that has hovered around 0.6. Ans: B 6. The Gini coefficient in a perfectly unequal society will have a Gini coefficient of _____ while a perfectly equal society will have a Gini coefficient equal to _____. 7. Consider two economies, both with 1,000 people and both with an average per capita income of $10,000. In Anyland, 999 households receive no income while one household receives all $10 million. In Everyland, 999 households each receive $1,001 of income while one household receives $9 million. The 90 – 10 wage gap in Anyland is _____ while the 90 – 10 wage gap in Everyland is _____ .
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